From the August 2010 issue of Research Magazine • Subscribe!

August 1, 2010

Targeting Brazilian MidCaps

Seeking midcap ground in Brazil.

Global X Funds, a New York-based ETF provider, has launched the Global X Brazil Mid Cap ETF (BRAZ). The fund owns midcap stocks with market sizes between $2 to $10 billion that are domiciled in Brazil.

The industry sector breakdown includes 20 percent utilities, 17 percent non-cyclical consumer, 16 percent industrial, 15 percent financials, 14 percent basic materials, 9 percent cyclical consumer, and 9 percent communications.

Some of the 40 companies owned within BRAZ include cosmetics company Natura Cosmeticos, real estate firm Cyrela Brazil Realty, mobile tech company Tele Norte Leste, food distributor Hypermarcas, and materials firm Metalurgica Gerdau.

The largest U.S.-listed Brazil ETF in terms of assets is the $2.8 billion iShares MSCI Brazil ETF (EWZ). In 2009, EWZ gained 123.98 percent but through the middle of this year has given back around 10 percent. EWZ's annual expense ratio is 0.65 percent.

In the coming months, Global X is planning to introduce a series of Brazilian industry sector ETFs.

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